Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Emerson Radio (AMEX: MSN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.
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- Compared to its closing price of one year ago, MSN's share price has jumped by 28.66%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Although MSN's debt-to-equity ratio of 0.00 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.55, which clearly demonstrates the ability to cover short-term cash needs.
- MSN, with its decline in revenue, slightly underperformed the industry average of 28.6%. Since the same quarter one year prior, revenues fell by 34.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- EMERSON RADIO CORP's earnings per share declined by 10.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, EMERSON RADIO CORP reported lower earnings of $0.39 versus $0.59 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Household Durables industry average. The net income has decreased by 10.2% when compared to the same quarter one year ago, dropping from $2.63 million to $2.36 million.
-- Written by a member of TheStreet Ratings Staff